Aid, Volatility and Growth Again. When Aid Volatility Matters and When It Does Not - Archive ouverte HAL Accéder directement au contenu
Article Dans Une Revue UNU-WIDER Research Paper Année : 2008

Aid, Volatility and Growth Again. When Aid Volatility Matters and When It Does Not

Résumé

In previous papers we have argued that aid is likely to mitigate the negative effects of external shocks on economic growth (i.e., aid is more effective in countries that are more vulnerable to external shocks). Recently an important debate has emerged about the possible negative effects of aid volatility itself. However, the cushioning effect of aid may involve some volatility in aid flows, which then is not necessarily negative for growth. In this paper we examine to what extent the time profile of aid disbursements may contribute to an increase or a decrease of aid effectiveness. We first show that aid, even if volatile, is not clearly as procyclical as often argued, and, even if procyclical, is not necessarily destabilizing. We measure aid volatility by several methods and assess procyclicality of aid with respect to exports, thus departing from previous literature, which usually assesses procyclicality of aid with respect to national income or fiscal receipts. The stabilizing/destabilizing nature of aid is measured by the difference in the volatility of exports and the volatility of the aid plus exports flows. Then, in order to take into account the diversity of shocks to which aid can respond, we consider the effect of aid on income volatility and again find that aid is making growth more stable, while its volatility
Fichier non déposé

Dates et versions

hal-00333047 , version 1 (22-10-2008)

Identifiants

  • HAL Id : hal-00333047 , version 1

Citer

Patrick Guillaumont, Lisa Chauvet. Aid, Volatility and Growth Again. When Aid Volatility Matters and When It Does Not. UNU-WIDER Research Paper, 2008, 78, pp.13. ⟨hal-00333047⟩
109 Consultations
0 Téléchargements

Partager

Gmail Facebook X LinkedIn More